In a new article for Bloomberg, BWC Chair Bill Dudley argues that despite a benign June CPI report easing near-term pressure, the case for the Fed to tighten monetary policy remains strong. Dudley points to elevated underlying inflation alongside full employment, buoyant financial conditions that suggest policy isn’t actually restrictive, and an AI investment boom pushing up demand and prices. Ultimately, he decides that the risks of under-tightening now outweigh the costs of policy that later proves modestly too tight.

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